Property Management Accounting
Property Management Accounting
Can I Use QuickBooks Online for my Construction Company?
If you are a property management company who has been told that QuickBooks Online won’t work for your property management company, you may want to take a second look. To truly understand QuickBooks Online you must understand the idea of SaaS, cloud computing, and app integrations.
So, what is SaaS?
SaaS stands for Software as a Service. QuickBooks Online is designed to be run from the cloud and one of the major benefits of this cloud computing model is the ability for QuickBooks Online to integrate seamlessly with other cloud-based apps. Cloud computing and SaaS programs – “apps” – are really the future of small business management.
The beauty of app integrations with other cloud-based software is that now you can take your accounting software – QuickBooks Online – and link it directly to a Property Management Software – for instance, Arthur Online, Pilera, Hodify or Rentigo – and have all of the integrated property management and accounting data be magically imported into QuickBooks Online without having to do any manual data entry from one program to the other.
QuickBooks Online by itself is also an effective solution for the accounting where different entities are involved in the management of properties. Often property management companies have a multitude of properties owned by different investment groups with a number of subcontractors or employees in diverse locations. The centralization of the accounting and information system online for ready access to all involved parties assists in the recording of transactions and the availability of needed reports.
Separate companies can be set up in QuickBooks for the different owners of the properties. In addition, for each separate company, different classes can be used in QuickBooks to keep track of the separate reporting of the different apartments owned by each client. This is especially useful when the apartments are in different locations, since the Internal Revenue Service requires a decomposition of income and expenses by location on Schedule E for individuals and sole member limited liability companies and on Form 8825 for a partnership and S corporation. By breaking out and recording all rental income and expenses by properties in QuickBooks, you will save hundreds, if not thousands, of dollars in tax preparation fees at the end of the year by not requiring your outside certified public accountant to reconstruct this allocation at year-end.
You can also identify all “tenants” by apartment or unit number. This way classes do not need to be used. This may prove to be a real time saver for data entry since classes would not need to be employed, saving data entry for countless invoices. Then individual tenants could be set up as a “sub-tenant” in QuickBooks, allowing the direct billing to this tenant and appropriate follow up and reporting. Using this systemcan be easier and more accurate to post information to apartments rather than to individuals, since many names are similar and since many apartments have more than one occupant, often creating misallocations of rental receipts.
You could also enter bills by location rather than individual tenants. Tax returns require only reporting by location, not by individual tenants. For example, if you own several multi-family homes, you need not track all expenses by tenant but simply by location or the address of the home.
A great time using QuickBooks Online is using Online Banking. With Online Banking, you can download your unrecorded transactions directly from the bank and post them into QuickBooks with a few clicks
You can segregate repairs and maintenance from capital improvements for financial and tax reporting.
QuickBooks Online may be the accounting software solution for your property management business, especially if you have a number of different individuals or companies involved in its operation. Because it is accessible on the internet to all permitted users wherever they may be located, receipts and deposits can be entered by the individual handling collections; bills, invoices, and statements can entered or prepared by the bookkeeper when received or required; purchase orders can be prepared and entered by the superintendent when needed; and profit and loss reports can be viewed at will by owners. QuickBooks Online offers enough robustness for most property management companies and may obviate the need of additional branch offices for property owners and managers by offering remote access to the properties’ financial records.
If QuickBooks Online sounds good to you, you should start today by clicking here to set up a free consultation with Integrity Bookkeeping Plus, LLC.